SOURCE: MIND CTI Ltd.

November 15, 2005 16:00 ET

MIND CTI Reports Sequential Revenue Growth and Increased Visibility

YOQNEAM, ISRAEL -- (MARKET WIRE) -- November 15, 2005 -- MIND CTI Ltd. (NASDAQ: MNDO), a leading provider of convergent end-to-end billing and customer care solutions for VoIP, Mobile, 3G and Triple-play carriers worldwide, today announced results for the third quarter ended September 30, 2005.

Key Highlights of Q3 2005

--  Completed acquisition of US based company and integration of products
    and teams is on track.
--  Revenues were $4.06 million, a 19% increase from $3.42 million in the
    previous quarter and a 12% decrease from $4.6 million in the third quarter
    of 2004.
--  Operating income was $586 thousand, compared to $687 thousand in the
    previous quarter and $809 thousand in the third quarter of 2004.
--  Net income for the third quarter was $742 thousand or $0.03 per
    diluted share, compared with a net income of $1.81 million or $0.08 per
    diluted share in the third quarter of 2004.
--  Three new customer wins and multiple customer upgrades (both license
    and services upgrades).
    
Monica Eisinger, MIND chairperson and chief executive officer, commented: "We had an exciting quarter, full of activity and achievements. One major event influenced our activity in the third quarter, the acquisition of Sentori, a US based provider of customer care and billing solutions to wireless carriers and mobile virtual network operators (MVNO's). Through the acquisition we added experienced professionals to our team and increased the customer base, with customers in Scandinavia, the Caribbean and the US. With our combined, stronger team, focused on the wireless space, we are able to enhance support to all our customers and are prepared to supply their future needs.

As previously estimated, the acquisition was neutral to earnings per share in the third quarter, excluding acquisition related costs and the financial income was lower this quarter due to a decrease in interest gained on our cash. We expect to reach again the level of 20% operating margins in the near future.

The valuable customer base, well supported by our devoted professional team; the ongoing investment in development of enhanced functionality and state-of-the-art technology; and the talented team in sales and business development are the basis for our expected continuous growth. The larger deals we secured and the long term contracts add to our visibility."

Revenue Distribution for Q3 2005

The geographic revenue breakdown, as a percentage of total revenues, was as follows: sales in the Americas represented 41%, Europe represented 40%, Africa and APAC represented 12% and Israel represented 7%.

Revenue from our customer care and billing software totaled $3.10 million, while revenue from our enterprise call management software was $954 thousand. The revenue breakdown from our business lines of products was $1.56 million, or 39%, from licenses, $1.44 million, or 35%, from maintenance and $1.05 million, or 26%, from services.

As of September 30, 2005, we had 270 employees in our offices in Israel, Romania, the United States and China.

Conference Call Information

MIND will host a conference call on November 16, at 8:30 a.m., Eastern Time, to discuss the Company's third quarter results and other financial and business information, including trends and guidance for the near future. The call will be carried live on the Internet via www.fulldisclosure.com and the MIND website, www.mindcti.com. For those unable to listen to the live web cast, a replay will be available.

About MIND

MIND CTI Ltd. is a leading provider of scalable and cost-effective end-to-end billing and customer care solutions for VoIP, Mobile, 3G and Triple-play carriers worldwide. Since 1997 MIND has been a pioneer in enabling the VoIP technology for emerging and incumbent service providers. In August 2005 MIND acquired Sentori, Inc., a US based provider of customer care and billing solutions to wireless carriers and mobile virtual network operators (MVNO's). MIND operates from offices in Europe, Israel, the United States and China. For financial information, reports and presentations, please visit the Investor Relations site: http://www.mindcti.com/ir

For financial information, reports and presentations, please visit the Investor Relations site: http://www.mindcti.com/ir

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: All statements other than historical facts included in the foregoing press release regarding the Company's business strategy are "forward looking statements." These statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements are not guarantees of future performance, and actual results may materially differ. The forward looking statements involve risks, uncertainties, and assumptions, including the risks discussed in the Company's filings with the United States Securities Exchange Commission. The Company does not undertake to update any forward-looking information.

                                            MIND C.T.I. LTD.
                                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                        September 30      December 31,
                                     2005        2004       2004
                                  ----------  ----------  ----------
                                        (Unaudited)       (Audited)
                                  ----------------------  ----------
                                           U.S. $ in thousands
                                  ----------------------------------

                 Assets
CURRENT ASSETS:
  Cash and cash equivalents       $   10,984  $    7,870  $   18,687
  Accounts receivable:
     Trade                             3,694       3,071       3,418
     Interest accrued on
      long-term bank deposits                      1,511         242
                Other                    716         800         773
  Inventories                             18          11          18
                                  ----------  ----------  ----------
        Total  current assets         15,412      13,263      23,138
LONG-TERM BANK DEPOSITS               30,000      47,000      30,000
OTHER ASSETS                             437         485         538
PROPERTY AND EQUIPMENT, net of
 accumulated depreciation and
 amortization                          2,057       1,768       1,790
GOODWILL AND OTHER
 INTANGIBLE ASSETS,
 net of accumulated amortization       8,800         300         250
                                  ----------  ----------  ----------
        Total  assets             $   56,706  $   62,816  $   55,716
                                  ==========  ==========  ==========
  Liabilities and shareholders'
   equity
CURRENT LIABILITIES -
  Accounts payable and accruals:
     Trade                        $      809  $      322  $      466
     Deferred revenues                 4,614      *1,675       1,680
     Other                             1,912      *1,944       2,124
                                  ----------  ----------  ----------
        Total  current
         liabilities                   7,335       3,941       4,270
BANK LOANS                                        10,000
OTHER LONG TERM LIABILITIES               97
                                  ----------  ----------  ----------
EMPLOYEE RIGHTS UPON RETIREMENT        1,098       1,117       1,200
                                  ----------  ----------  ----------
        Total liabilities              8,530      15,058       5,470
                                  ----------  ----------  ----------
SHAREHOLDERS' EQUITY:
  Share capital                           53          53          53
  Additional paid-in capital          59,399      58,728      59,079
  Accumulated deficit                (11,276)    (11,023)     (8,886)
                                  ----------  ----------  ----------
        Total  shareholders'
         equity                       48,176      47,758      50,246
                                  ----------  ----------  ----------
        Total  liabilities and
         shareholders' equity     $   56,706  $   62,816  $   55,716
                                  ==========  ==========  ==========

                        * Reclassified


                           MIND C.T.I. LTD.
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                             Nine months         Three months
                                ended               ended       Year ended
                             September 30        September 30  December 31,
                            2005      2004      2005      2004      2004
                          --------  --------  --------  --------  --------
                              (Unaudited)         (Unaudited)     (Audited)
                          ------------------  ------------------  --------
                             U.S. $ in thousands (except per share data)
                          --------  --------  --------  --------  --------

REVENUES                  $ 10,562  $ 12,926  $  4,058  $  4,602  $ 17,806
COST OF REVENUES             2,691     3,189     1,084     1,102     4,394
                          --------  --------  --------  --------  --------
GROSS PROFIT                 7,871     9,337     2,974     3,500    13,412
RESEARCH AND DEVELOPMENT
   EXPENSES - net            3,561     2,870     1,452     1,024     3,833
SELLING, GENERAL AND
   ADMINISTRATIVE EXPENSES:
   Selling                   1,566     3,460       546     1,130     4,517
   General and
    administrative           1,143     1,243       390       537     1,864
                          --------  --------  --------  --------  --------
OPERATING INCOME             1,601     2,164       586       809     3,198
FINANCIAL AND OTHER
 INCOME - net                1,186     2,697       165     1,044     3,841
                          --------  --------  --------  --------  --------
INCOME BEFORE TAXES ON
 INCOME                      2,787     4,861       751     1,853     7,039
TAXES ON INCOME                 34       121         9        44       162
                          --------  --------  --------  --------  --------
NET INCOME                $  2,753  $  4,740  $    742  $  1,809  $  6,877
                          ========  ========  ========  ========  ========

EARNING PER SHARE:
   Basic                  $   0.13  $   0.23  $   0.03  $   0.09  $   0.33
                          ========  ========  ========  ========  ========
   Diluted                $   0.13  $   0.22  $   0.03  $   0.08  $   0.32
                          ========  ========  ========  ========  ========
WEIGHTED AVERAGE NUMBER OF
 ORDINARY SHARES USED IN
 COMPUTATION OF EARNINGS
 PER ORDINARY SHARE - IN
 THOUSANDS:
   Basic                    21,438    21,056    21,477    21,089    21,089
                          ========  ========  ========  ========  ========
   Diluted                  21,579    21,511    21,582    21,486    21,468
                          ========  ========  ========  ========  ========




                           MIND C.T.I. LTD.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                             Nine months         Three months
                                ended               ended       Year ended
                             September 30        September 30  December 31,
                            2005      2004      2005      2004      2004
                          --------  --------  --------  --------  --------
                              (Unaudited)         (Unaudited)     (Audited)
                          ------------------  ------------------  --------
                             U.S. $ in thousands (except per share data)
                          --------  --------  --------  --------  --------

CASH FLOWS FROM OPERATING
   ACTIVITIES:
   Net Income                2,753  $  4,740       742  $  1,809  $  6,877
   Adjustments to
    reconcile net income
    to net cash provided
    by or used in
    operating activities:
      Depreciation and
       amortization            668       520       330       172       680
      Accrued severance
       pay - net                (8)      119       (20)       62       202
      Capital gain on sale
       of property and
       equipment - net         (39)      (12)       (9)      (18)       (7)
      Changes in operating
       asset and liability
       items:
         Decrease (increase)
          in accounts
          receivable:
            Trade             (109)     (890)   (1,009)     (720)   (1,237)
            Interest
             accrued on
             long-term
             bank deposits     242    (1,029)       29      (628)      240
            Other               71        64        24        27        93
         Increase (decrease)
          in accounts
          payable and
          accruals:
            Trade             (574)     (396)     (446)     (999)     (252)
            Deferred
             Revenues          (86)                 79
            Other           (1,240)      896      (837)      176     1,081
         Decrease (increase)
          in Inventories                             1                  (7)
                          --------  --------  --------  --------  --------
   Net cash provided by
    (used in) operating
    activities               1,678     4,012    (1,116)     (119)    7,670
                          --------  --------  --------  --------  --------
CASH FLOWS FROM INVESTING
 ACTIVITIES:
   Purchase of property
    and equipment             (543)   (1,030)     (122)     (328)   (1,226)
   Acquisition of
    subsidiary (a)          (4,233)             (4,233)
   Amounts withdrawal
    (funded) in respect
    of accrued severance
    pay                         43       (67)        2       (37)     (120)
   Investments in long-
    term bank deposits     (10,000)  (10,000)                      (40,000)
   Withdrawal of long-term
    bank deposits           10,000     3,000    10,000              50,000
   Proceeds from sale of
    property and equipment     175        86        57        79       145
                          --------  --------  --------  --------  --------
   Net cash provided by
    (used in) investing
    activities              (4,558)   (8,011)    5,704      (286)    8,799
                          --------  --------  --------  --------  --------
CASH FLOWS FROM FINANCING
 ACTIVITIES:
   Bank loans received                10,000
   Employee stock options
    exercised and paid         320       214        42        94       563
   Dividend paid            (5,143)   (2,736)                       (2,736)
                          --------  --------  --------  --------  --------
   Net cash provided by
    (used in) financing
    activities              (4,823)    7,478        42        94    (2,173)
                          --------  --------  --------  --------  --------
NET INCREASE (DECREASE)
 IN CASH AND CASH
 EQUIVALENTS                (7,703)    3,479     4,630      (311)   14,296
BALANCE OF CASH AND CASH
 EQUIVALENTS AT BEGINNING
 OF PERIOD                  18,687     4,391     6,354     8,181     4,391
                          --------  --------  --------  --------  --------
BALANCE OF CASH AND CASH
 EQUIVALENTS AT END OF
 PERIOD                     10,984  $  7,870    10,984  $  7,870  $ 18,687
                          ========  ========  ========  ========  ========


                              MIND C.T.I. LTD.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




                                                        Nine months ended
                                                        September 30, 2005
                                                        -------------------
                                                        U.S. $ in thousands
                                                        -------------------


(a)  Acquisition of subsidiary:
       Assets and liabilities of the subsidiary upon acquisition:
         Working capital (excluding cash and cash Equivalents)      (4,761)
         Long-lived assets                                             277
         Intangible assets                                           1,871
         Long-term loans and other liabilities                        (120)
         Goodwill arising on acquisition                             6,966
                                                                   -------
       Cash paid- net                                                4,233
                                                                   =======

Contact Information

  • For more information please contact:
    Andrea Dray
    MIND CTI Ltd.
    Tel: +972-4-993-6666
    Email Contact